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Having a global internet service with at cost launch prices is about 3-8 trillion dollar business. That's one product line at Space X.
by peterlada 4mo ago
Having a global internet service with at cost launch prices is about 3-8 trillion dollar business. That's one product line at Space X.
- ben_w 4mo agoOnly if the world doesn't regard the owner of said telecoms service as a political security risk. Tricky sell given increasing distrust of globalisation and the new trend of sovreign-shoring.
- chadgpt3 4mo agoAlso given, you know, the politically motivated bans from that service.
- fsuts 4mo agoSource of that valuation? As doubt its true People in less wealthy countries will pay a cheaper sum than wealthier countries. Also China is accelerating its own equivalent
- NuclearPM 4mo agoBullshit
- triceratops 4mo agoGenuinely curious about the math behind this. https://www.msci.com/indexes/index/754891 https://www.msci.com/indexes/index/754891 this index represents a decent chunk of the worldwide telecommunication industry. It's only worth $1.45T in total. They roll trucks and dig trenches to provide internet service - and provide other telecom services besides. My gut tells me that's cheaper than launching rockets. And these companies already provide service to most of the humans that have money. I think SpaceX has done brilliantly in lowering the cost of rocket launches. I still don't understand or believe in the valuation.
- Schiendelman 4mo agoI think it's possible that one reason that industry is only worth $1.45T is that they have to maintain all that infrastructure. It may be significantly cheaper to operate it all as satellites.
- triceratops 4mo agoAnd you believe cables fail more regularly than satellites? Or that replacing them is more expensive? Any numbers for this?
- Schiendelman 4mo agoInteresting - what other than cables can you think of in a ground network?
- triceratops 4mo agoEverything else would also be needed in a satellite internet network.
- adammarples 4mo agoReally because the entire world's economy is only about 120Tn. One internet provider is about 5% of that?
- tills13 4mo agoMe selling lemonade at the end of my driveway is about 300-800 million dollar business. That's just one thing I sell at the end of my driveway. 250k people in my city x $4/lemonade x 365 days per year
- rhplus 4mo agoBS check: $8T is $1000 per person on this planet. A healthy P/E ratio of 25 would translate to earning $40/year in profit from every person on the planet. SpaceX/Starlink obviously doesn’t just walk in and get everyone as a customer though. They have roughly 10 million customers right now. Let’s be generous and say they have 20 million. That $8T works out at $400K per customer valuation which at a 50 P/E would mean $8K/year/customer profit per customer or $666/month/customer profit. Those are generous numbers. Scaling back to 10 million customers and 25 P/E would require $2666/month/customer in profit to get to $8T valuation. For Internet service?
- ben_w 4mo agoNot that it materially changes your point, but I would not be surprised if Starlink reaches 200 million customers at some point, even with my other comment about Musk personally being increasingly seen as a political security risk, the increasing distrust of globalisation, and the new trend of sovereign-shoring. $8T/(unreasonably high 50 P/E)/200M customers/12 months = $66.67 profit (not revenue) per customer per month. The moment Musk's reality distortion bubble stops functioning, his brands' PE ratios are likely to revert to the 5-15 levels of comparable businesses.